Startup Storytime: A Tale of Unicorns

LinkedIn is the world’s largest professional online network with more than 106 million monthly active members.

Most employers today search for applicant accounts on LinkedIn after receiving CVs.

Virtual presence on LinkedIn has become a must for professionals, employers and employees alike.

LinkedIn has also found its place on an academic level. In 2016, high schools in the US began teaching students to make LinkedIn accounts for college admissions.

While BrainStatistics found 7 out of 10 startups fail in 10 years, LinkedIn beat the odds and survived the high-mortality period. Launched in 2003, the networking service is today valued at $26 Billion.

At the time of its launch, billion-dollar startups were considered a myth. All of this makes LinkedIn’s story is the modern tale of a unicorn.

There are currently over a hundred startup companies valued over $1 Billion. The days of the legendary horse are over. Unicorns have evolved and they’re even more precious than before.

According to CBS Insights, there are currently 185 unicorn companies with a cumulative value of $664 Billion. Among these companies are known giants such as Uber, Airbnb, Snapchat, Spotify, Dropbox, Buzzfeed and others.

The MENA region has 2 native tech unicorns, Souq.com and Careem. Souq.com, the amazon of the middle east, and Careem, Uber’s middle eastern rival, are both valued at $1 Billion.

While unicorn companies are growing, investors still consider some of these companies to be unreasonably over-valued. An example of this is Uber, which was valued at $62 Billion in 2016, estimated to be a higher valuation than the entire global taxi market.

In an article published on Bloomberg, an expert on equity valuation said Uber’s actual value was at less than half of the stated amount, at $30 Billion.

According to investors, low interest rates play a key role in the matter. Low interests boost investment money, giving a false sense of security.

Despite these claims, unicorns are booming and continue to generate profit. Unicorn stocks are at an all-time high, and valuations are marking significant digits, making the startup industry one of the most profitable in our era.